Review of 2012 – EUR - Skanska

Nordic countriesSwedenNorwayFinlandDenmarkIn the Nordic countries, Skanska primarily develops office properties in major urban areas, whilelogistics and high-volume retail properties are developed in strategic locations. In 2012, a numberof property divestments were carried out in Sweden.Distribution of leasablearea, ongoing projectsCommercial Property Development in the Nordic countriesunutilizedbuilding rightsCompetitorsDistributionSweden, 86%Norway, 0%Finland, 10%Denmark, 4%EUR M 2012 2011Revenue 465 619Operating income 106 147of which gain from divestment of properties 1 112 139Capital employed, EUR M 824 751Return on capital employed, % 2) 11.0 14.91 Additional gain included in eliminations was 4 152 Calculated in accordance with the definition of financial targets.Sweden, 73%Norway, 2%Finland, 6%Denmark, 19%NCCVasakronanDiligentiaKLP EiendomYITLemminkäinenMajor eventsA number of properties were divested in Sweden in2012, including offices, hotels and conference centers.The Klara Strand property in Stockholm was sold forEUR 126 M, thus making it the largest divestment duringthe year in terms of value. One of the properties wasdivested for a guaranteed EUR 103 M, which may beadjusted upwards by its completion in 2015. All propertieswere divested at favorable prices.At the beginning of 2012, an office project was startedup in Hyllie, Malmö, Sweden. The property will be certifiedat the very highest level, Platinum, in accordancewith the international environmental certification system,LEED. The property will embody new eco-smartsolutions, and the construction material will be scrutinizedfor their environmental and health impacts. Duringconstruction, a minimum of 95 percent of the wastewill be recycled.In 2012, a total of 109,000 sq m of office space wasleased in the Nordics.MarketThe vacancy rate was low and stable in the Nordiccountries, and the strongest demand was for modern,efficient and green properties.Properties as investment class continued to be ofinterest to investors during 2012, and Skanska’s propertyportfolio of energy-efficient, well-situated and highoccupancyproperties has enabled several divestmentswith good capital gains.EarningsProperty divestments resulted in very good capital gainsin 2012. The gain on sale of properties totaled EUR 112 M.This represented sales that exceeded the carryingamount by 37 percent. In addition, in the consolidatedaccounts there were previously eliminated intra-Groupgains of EUR 4 M.Outlook 2013–– Ongoing projects at January 1, 2013: 16.–– Occupancy rate/Estimated surplus value in unsoldongoing projects: 94 percent/EUR 100 M.–– Occupancy rate/Estimated surplus value in unsoldcompleted projects: 74 percent/EUR 70 M.SwedenNorwayFinlandDenmarkThe vacancy rates for office premises in most of Skanska’s citiesin the Nordic region were relatively stable, and property investorscontinue to demand modern properties with stable tenants,primarily in Sweden and Norway.56 Commercial Property Development Substantial growth Growth Stable Decline Significant declineSkanska Review of 2012 – EUR version